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The zones of discrimination for M-Score is as such:
An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.
Coca-Cola Enterprises Inc has a M-score of -2.47 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Coca-Cola Enterprises Inc was -1.94. The lowest was -4.69. And the median was -2.56.
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.
The M-Score Variables:
The M-score of Coca-Cola Enterprises Inc for today is based on a combination of the following eight different indices:
|M||=||-4.84||+||0.92 * DSRI||+||0.528 * GMI||+||0.404 * AQI||+||0.892 * SGI||+||0.115 * DEPI|
|=||-4.84||+||0.92 * 1.0307||+||0.528 * 0.9801||+||0.404 * 0.9995||+||0.892 * 1.034||+||0.115 * 1.3796|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9487||+||4.679 * -0.0149||-||0.327 * 1.0695|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $1,800 Mil.|
Revenue was 2136 + 2333 + 1870 + 2032 = $8,371 Mil.
Gross Profit was 808 + 846 + 650 + 688 = $2,992 Mil.
Total Current Assets was $2,828 Mil.
Total Assets was $9,286 Mil.
Property, Plant and Equipment(Net PPE) was $2,167 Mil.
Depreciation, Depletion and Amortization(DDA) was $308 Mil.
Selling, General & Admin. Expense(SGA) was $1,951 Mil.
Total Current Liabilities was $2,847 Mil.
Long-Term Debt was $3,419 Mil.
Net Income was 238 + 198 + 115 + 135 = $686 Mil.
Non Operating Income was 0 + 1 + -1 + -3 = $-3 Mil.
Cash Flow from Operations was 444 + 80 + 67 + 236 = $827 Mil.
|Accounts Receivable was $1,689 Mil.
Revenue was 2174 + 2156 + 1850 + 1916 = $8,096 Mil.
Gross Profit was 787 + 753 + 634 + 662 = $2,836 Mil.
Total Current Assets was $2,929 Mil.
Total Assets was $9,692 Mil.
Property, Plant and Equipment(Net PPE) was $2,282 Mil.
Depreciation, Depletion and Amortization(DDA) was $473 Mil.
Selling, General & Admin. Expense(SGA) was $1,989 Mil.
Total Current Liabilities was $2,794 Mil.
Long-Term Debt was $3,321 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1800 / 8371)||/||(1689 / 8096)|
2. GMI = Gross Margin Index
Measured as the ratio of gross margin in year t-1 to gross margin in year t.
Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(846 / 8096)||/||(808 / 8371)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (2828 + 2167) / 9286)||/||(1 - (2929 + 2282) / 9692)|
4. SGI = Sales Growth Index
Ratio of sales in year t to sales in year t-1.
Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.
5. DEPI = Depreciation Index
Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.
DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.
|DEPI||=||(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))||/||(Depreciation_t / (Depreciaton_t + PPE_t))|
|=||(473 / (473 + 2282))||/||(308 / (308 + 2167))|
6. SGAI = Sales, General and Administrative expenses Index
The ratio of SGA expenses in year t relative to year t-1.
SGA expenses index > 1 means that the company is becoming less efficient in generate sales.
|SGAI||=||(SGA_t / Sales_t)||/||(SGA_t-1 /Sales_t-1)|
|=||(1951 / 8371)||/||(1989 / 8096)|
7. LVGI = Leverage Index
The ratio of total debt to total assets in year t relative to yeat t-1.
An LVGI > 1 indicates an increase$sgai= in leverage
|LVGI||=||((LTD_t + CurrentLiabilities_t) / TotalAssets_t)||/||((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)|
|=||((3419 + 2847) / 9286)||/||((3321 + 2794) / 9692)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(686 - -3||-||827)||/||9286|
An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.
Coca-Cola Enterprises Inc has a M-score of -2.47 suggests that the company will not be a manipulator.
Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations
Coca-Cola Enterprises Inc Annual Data
Coca-Cola Enterprises Inc Quarterly Data